* Canadian dollar at C$1.1100 or 90.09 U.S. cents
* Bond prices mostly higher across the maturity curve
By Leah Schnurr
TORONTO, Feb 26 The Canadian dollar weakened
modestly against the greenback on Wednesday as the lack of
domestic economic data until later in the week left the currency
with few strong trading catalysts.
Markets also had a cautious tone as investors watched
developments in China's currency. Dealers suspect the country's
central bank has engineered the recent decline in the yuan to
inject more two-way volatility into the market.
"It has people retrenching back to their traditional safe
havens," said Don Mikolich, executive director of foreign
exchange sales at CIBC World Markets in Toronto.
"The Canadian dollar is not traditionally the biggest
recipient of that safe-haven flow. It causes people to be a
little more cautious in terms of where they're putting their
The Canadian dollar was at C$1.1100 to the
greenback, or 90.09 U.S. cents, weaker than Tuesday's close of
C$1.1086, or 90.20 U.S. cents.
After pushing higher in the first weeks of February, the
Canadian dollar has given back much of that advance in recent
sessions. While the currency has stabilized after a sharp drop
in January, it is still not far from a 4-1/2-year low and most
analysts expect the loonie could see more downside.
"We've been trying to find some new direction here, it's
been really trapped in that range we've been seeing for a few
sessions now," said Mikolich.
"With the real lack of any Canadian data out and Stateside
(data) being at or slightly below market expectations, that has
left the Canadian dollar trading in that C$1.10 to C$1.11
The Canadian economic calendar has been light this week but
the pace will pick up toward the end of the week with data on
the current account due Thursday and fourth-quarter gross
domestic product on Friday.
Economic growth is forecast to have slowed to an annualized
2.5 percent in the last months of 2013, but analysts will be
looking to see how much of an impact harsh winter weather had on
Canadian government bond prices were mostly higher across
the maturity curve, with the two-year up 1.2 Canadian
cents to yield 1.017 percent and the benchmark 10-year
up 5 Canadian cents to yield 2.481 percent.